Unisys? board of directors has defeated a motion by the company?s largest institutional shareholder to break it up and spin off business divisions.
New York-based Greenway Partners ? the single largest holder of Unisys stock ? had proposed either selling or spinning off Unisys? hardware business from its information services and customer support operations. The three operational areas were created as a result of a corporate restructuring in January last year.
But the Greenway proposal was rejected by about 60 per cent of shareholders at the company?s annual meeting in Philadelphia last week. A second motion to withhold support from four directors seeking re-election to the board was also dismissed.
This is the second time the company has been defeated in an attempt to break up Unisys. In April 1996, a plan to spin off divisions to create three separate public companies, owned by existing stockholders, was defeated by a two-thirds majority.
James Unruh, Unisys CEO, condemned Greenway?s actions as unnecessary distraction from restoring Unisys to long-term profitability. ?Much of the discussion here today has not been about improving our business,? he said. ?Virtually every knowledgeable person who has considered the merits of the Greenway proposals to break up the company believes that they are without merit.?
He also hit out at Greenway?s attempt to block the re-election of board members. ?Greenway has urged shareholders to withhold votes from the directors, ostensibly to send a message,? he said. ?If the message is that the stock price is too low, then all of us ? management and the board ? have the message.?
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